TICKY FULLERTON, PRESENTER: The head of Woolworths has lashed out at the Federal Government, accusing it of shackling business with its new budget measures.

CEO Grant O'Brien also hit out at those who see the supermarket industry as a cosy duopoly. He says consumers will be the ultimate losers from attempts to muzzle the industry.

Here's finance correspondent Phillip Lasker.

PHILLIP LASKER, REPORTER: The man who has been at the helm of supermarket giant Woolworths for a year had come to highlight his basic philosophy.

GRANT O'BRIEN, CEO, WOOLWORTHS: Those who use innovation to delight and empower their customers in the new online world, but also in their traditional stores will come out on top.

PHILLIP LASKER: But he was also there to deliver a message to those politicians and commentators attacking Coles and Woolworths for having far too much market power, and using it to keep prices higher while bullying suppliers. The competition regulator, the ACCC, is looking into the treatment of suppliers by the supermarket chains.

GRANT O'BRIEN: If you're Aldo or Costco and you're a business three times the size of Woolworths you get pretty serious grunt with suppliers. We've got about a third of the grunt, and yet we're competing alongside them in a marketplace here in Australia, and I'm up for that.

But it's things like that that we've got to get better in the minds of politicians, better in the minds of regulators, that scale for Australian retailers is an important consideration for us to be able to compete going forward.

PHILLIP LASKER: The Woolworths boss also claimed many of the supplier markets were dominated by a few big players - and he pointed to the demise of the once powerful Franklin's supermarket chain.

GRANT O'BRIEN: Frankly it would be a very brave person in my view who would interfere in the retail market at the moment, given the momentous change that's occurring in retail at the moment.

PHILLIP LASKER: And there was also criticism of the Government's decision in the mid-year budget review to make big business pay tax monthly.

GRANT O'BRIEN: It's an additional cost for organisations because we've got to find funding for the cash flow that's now changed. I think if you're shackling businesses, then you're tying the hands of the very things that are going to lead to the growth of this organisation in the longer term.

PHILLIP LASKER: He could say "biting the hand that feeds the economy".